Yes, GST (5%) or HST (13-15%) applies to most domestic air travel within Canada, including base fares, fuel surcharges, and airport improvement fees. International flights and transborder flights (to the US) are generally zero-rated (0% GST/HST) if part of a continuous journey.
GST applies to domestic air travel, other than where: a domestic flight forms part of a ticket for international travel or is cross-referenced to an international ticket and is purchased at any time up to and including the date of international travel, or.
In India, the GST (Goods and Services Tax) on flight tickets varies based on the class of travel. For economy class tickets, the GST rate is 5%, while for business class tickets, it is 12%. These rates apply to both domestic and international flights.
The Federal Excise Tax: Federal excise tax is typically imposed on the sale of things like fuel, airline tickets, heavy trucks and highway tractors, indoor tanning, tires, tobacco, and other goods and services. This 7.5% tax on profits is often hidden from the customer as it is typically part of the domestic airfare.
The provinces have chosen not to require prices to include the GST, similar to their provincial sales taxes. As a result, virtually all prices (except for fuel pump prices, taxi meters and a few other things) are shown "pre-GST", with the tax (or taxes) listed separately.
For Tourists
When renting accommodation in Canada, you'll encounter various taxes: there are Federal Sales Taxes (GST/HST), Provincial Sales Tax and possibly also regional or municipal tourist taxes.
For all Canadian domestic flights excluding Quebec, HST applies to base fare, Nav and Surcharges, AIF, and ATSC charges. For all flights commencing in the province of Quebec, GST applies to base fare, Nav and Surcharges, AIF (in Quebec), and ATSC charges. For all transborder flights, HST is applied to AIF charges.
U.S. Federal Excise Tax: Airfares as well as certain seat selection fees (e.g. Legroom+ and Allegiant Extra) for travel within the 48 contiguous states include a 7.5% federal excise tax (FET). A domestic segment beginning or ending in Alaska or Hawaii is not subject in whole to the 7.5% FET.
Additional mandatory government fees quickly add to the cost:
The GST rate on flight tickets depends on the travel class: 5% for economy class and 18% for business or premium class, applicable to both domestic and international travel.
Tickets up to Rs. 100 attract 5% GST, while those above Rs. 100 attract 18%. Convenience fees charged by ticketing platforms are subject to GST as a separate component.
Can I claim GST on flight tickets for personal travel? No, GST cannot be claimed for booking tickets for personal travel. Input Tax Credit (ITC) is given only for flight tickets booked under the company GSTIN with correct invoicing for business purposes.
Notably, most online ticketing platforms, such as BookMyShow or PayTM, already include the applicable GST in the displayed ticket prices. This means that consumers do not have to worry about calculating the GST separately while making their bookings.
When a domestic ticket is reissued, GST is applied to the additional base fare and ticket taxes as well as the change fee which is receipted separately by EMD-S. The GST component of the change fee must be shown separately as a “UO” amount.
Transition Rule for Air Ticket Bookings
If you booked and paid for a premium-class ticket before September 22, 2025, the old 12% GST rate applies, even if you travel after this date. However, any new bookings or re-ticketing made on or after September 22, 2025, will be charged the new 18% GST rate.
Base Fare and Carrier imposed fees. 7.5% U.S. government excise tax. September 11th Security Fee of $5.60 per one-way trip, per passenger. Airport passenger facility charges (PFCs) of up to $18 roundtrip.
In most scenarios, event tickets are subject to sales tax. The only reason tickets may not be subject to sales tax is if the event is a fundraising event for a nonprofit or if an out-of-state ticket seller does not meet the economic nexus threshold for an event.
U.S. Domestic Transportation Tax is applied to the base fare of every ticket. It is collected by the Internal Revenue Service and the money is used to fund FAA operations such as Air Traffic Control and radar operations.
GST/HST/QST: Where applicable, these taxes are collected on flights and services provided in Canada. Generally, where the travel originates in the United States or the journey includes an international origin or destination, these taxes do not apply.
What is HST? HST is implemented in provinces that have agreed to harmonize their provincial sales tax with the federal GST. The HST rate varies by province, as each province sets its own rate. For example, in Ontario, the HST rate is 13%, whereas in Nova Scotia, it is 15%.
You can claim up to 50% of the amount of GST/HST you paid for the eligible tour package. The refund calculation is based on the number of nights of short-term accommodation in Canada included in the package.
Basic Groceries
It's a win for everyone that basic necessities like groceries are not taxed in Canada. These zero-rated items ensure that Canadians of all income levels can access the essentials without an added tax burden.
Common Examples of GST Exempt Transactions:
Financial services – Most banking services, interest payments, and insurance premiums. Residential rent – Rental income from residential properties. Donated goods and services – Items or services that are given away without payment.